2010 in what he called "a new miracle" despite a sharp economic contraction estimated at 4.2 percent of gross domestic product. Incoming new orders from the European Union to Greek firms were up 15 percent. "I believe in the third quarter we will see the first signs of growth in Greece," the minister in charge of economic reform said. "Our target is in 2011 to have one percentage point more of GDP from exports." His forecast was slightly more optimistic than that of the international lenders who rescued Greece from the brink of bankruptcy last May. They see the economy shrinking by a further 3 percent this year, with a return to growth only in the final quarter. Chrysohoidis said tourism would recover after a two-year slump as Europeans, tired of a harsh winter and encouraged by growth at home, return to Greece this summer. Tourism revenues, a pillar of the economy, have fallen by about 25 percent in the last two years, hit by images of anti-austerity unrest. CHINA INTERESTED The minister said China, which has already invested in the main port of Piraeus, is also eyeing opportunities in the tourism sector, such as buying and building hotels. Chinese officials have also pledged to buy Greek bonds, but no specifics have been announced. "They want to use Greece as a bridge to Europe," he said. The government has undertaken drastic fiscal reforms as a condition for a 110 billion euro bailout from the euro zone and the International Monetary Fund, and plans to boost public and private investment this year. Greece, which is entitled to 22 billion euros of EU regional aid in the bloc's 2007-2013 budget, would double its take-up of EU funds to 5 billion euros this year. "The first priority is to absorb more European development funds," Chrysohoidis said. Athens has only tapped 18 percent of the funds so far, and the minister aims to increase the absorption rate to 35 percent by the end of this year, mostly by cutting red tape. In addition, he said Athens would launch a public-private fund for development and entrepreneurship to provide 5 billion euros in loans and guarantees over two years to promote innovative new businesses. He said other initiatives were in the pipeline to cut one of the EU's highest youth unemployment rates, at over 30 percent, and to improve the investment climate by simplifying procedures for starting a business. A new law will drastically reduce start-up costs and Greece's notorious bureaucracy. "We needed 36 papers to licence a technician and now we will need seven," he said. "It cost a baker 6,000 euros to establish a business and now it will be only 1,700 euros." Chrysohoidis said the biggest threats to the growth strategy were a mood of national gloom and the risk of social unrest. "We have a very strong enemy -- depression, which is very deep. We have depression both in the economy and in the public mood," he said. To help a public struggling to cope with wage cuts and high inflation, the minister recently clinched a "gentlemens' agreement" with merchants which is expected to cut the average household bill for food and basics by 50 euros a month. Describing the Socialist government as "sprinters in a race to create a new Greece", he said he did not expect major strikes or public resistance to the reform programme, but that sporadic acts of violence could create a bad image and deter investment.
source: Reuters
